No. 92-022 INTHE SUPREME COURT OFTHE STATE OF MONTANA 1992

AMERICAN STATES INSURANCE COMPANY, Plaintiff and Respondent,

SUSAN WILLOUGHBY, MARK T. NIELSEN and JOHN GEERING, Defendants and Appellants.

APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable William J. Speare, Judge presiding.

COUNSEL OFRECORD: For Appellants: James P. Healow, Sweeney & Kealow, Billings,Montana For Respondent: Guy W. Rogers, Anderson, Brown, Gerbase, Cehull, Fulton, Haman & Ross, Billings, Montana

Submitted on Briefs: June 11, 1992JusticeR. C. McDonough delivered the Opinion of the Court.

Defendantsappeal fromthedecision of theThirteenth Judicial District, Yellowstone County, granting Plaintiff's motion for summary judgment and denying Defendant's motion for summary judgment. Plaintiff, American States,had requested a declaratory judgment stating that it did not have to indemnify or defend Defendant, Mark Neilsen, in two civil actions because the acts committed by Neilsen were not covered under his American States insurancepolicy. We affirm the District Court. There are two issues on appeal: 

### I. Did theDistrict Court err in granting summary judgment to Plaintiff because it ruled that Neilsen's actions were not covered under his American Statespolicy? 11. Did the District Court err in concluding thatNeilsenhad the burden of proving the reasonableness of the settlementswith Willoughby and Geering? Mark Neilsen attended the automobile races at Yellowstone Belaro Speedway with his wife and friends. Sometime during the evening, security guards received a complaint about Neilsen's behavior. Shortly thereafter, two security guards, Susan Willoughby and John Geering, entered the area where Mark Neilsen and his party were sitting. Susan and John observed Mark Neilsen being disruptive and approached him to request that he quiet down but he refused to change his behavior. 

### Aphysical altercation followedbetween NeilsenandWilloughbywhen Neilsenpushed or fell onWilloughby and theyboth fell to the ground. John Geering approached the two on the ground and attempted to assist Susan. Eventually, Mark Neilsen's wife, Joe Gonzales, the security guard supervisor, and a friend of Mark's joined themelee. Ultimately, Mark was restrained and taken under thegrandstand where he created another disturbance, tussling with Deputy Sheriff Ellis and damaging a police vehicle before he was subdued and placed inside the vehicle. Susan Willoughby and John Geering sustained injuries during the altercation and both went to the hospital following the incident. Willoughby complained of a sore back, sore leg, and swelling and a cut on her leg while John Geering was treated for three bites from Neilsen sustained during the scuffle. Neither party required hospitalization although Ms. Willoughby obtained a prescription. Criminal charges against Mark Neilsen followed the incident. Mr. Neilsen was charged with three counts of misdemeanor assault against Susan Willoughby, John Geering and 

### Deputy Sheriff Ellis. Mr. Neilsenpled guilty to these charges aswell as to one count of criminal mischief for damage to the police vehicle. Susan Willoughby and John Geering filed actions against Mark Neilsen for damages incurred during the incident at the Speedway and Neilsen sought indemnification from his insurance company. Neilsen's insurancepolicy with American Statesprovided that it would:pay up to our limit of liability for the damages.. .and provide a defense at our expense

# ...if

# ... a suit is brought against an insured for damages because of personal injury

# ... caused by an occurrence to which this coverage applies

# .... The exclusion provision of the policy states that coverage does not apply tobodilv injury

# ... which is ex~ected or intended by the insured. Inaddition,thisprovision states that the exclusion "does not apply to an act committed by or at the direction of the insured not intended to cause serious bodilv injury....( Emphasis original.) The word "occurrence" in the policy means an accident, including exposure to conditions,which results,during thepolicy period, in.

# ..personal injury. [Plersonal injuryo1 means bodily injury

# .... A procedural history of twounderlying caseswill clarify the present case. OnMay 9, 1989,Defendant SusanWilloughby filed an action against Mark Neilsen for personal damages for assault and battery. The complaint was later amended to include a count of negligence. Neilsen tendered the defense of this action to American States requesting that it provide a defense and indemnification of any damages awarded in the Willoughby action. American States offered to provide a defense forMr. Neilsen under a reservation of rights. Subsequent to this arrangement, Neilsen entered into a settlement with SusanWilloughby for $25,500without the knowledge or consent of American States. Neilsen assigned his rights underthe policy to Susan Willoughby in satisfaction of the settlement agreement. John Geering filedhis action againstMark Neilsen on May 29, 1991. Virtually the 

### same sequence 05 

### events followed 

### in this action and ultimately, Neilsen entered into a similar settlement agreement 

### with Geering, assigning his rights under his insurance policy without American State's knowledge or consent. American States filed the present action for a declaratory judgment that it did not have to indemnify or defend Neilsen in either of these actions. The District Court granted summary judgment 

### to American States. 

### Summary judgment is only proper under Rule 56(c),M.R.Civ.P., where the record discloses that no genuine issue of material fact existsand themoving party is entitled tojudgment as a

### matter of law. New Hampshire Ins. Group

### v. Strecker, (1990), 244 Mont. 478, 480, 798 P.2d 130, 131. I. Did the District 

### Court 

### err 

### in granting summary 

### judgment 

### to Plaintiff because it ruled thatNeilsenlsactionswere not covered under 

### his American States policy? American States contended that Neilsenvs actions were intentional 

### acts and thus excluded from coverage under his insurancepolicy. If the companywas liable for

### his actions, then American States argued that the settlement agreements were unreasonably high and that Neilsen had the burden to prove theywere reasonable, However, the Defendants contended that ~eilsen'sactions resulted in unintended injuries and were therefore accidental. They argued that accidental injuries fell within the coverage of the insurance policy and the exclusionprovision in thepolicy was not applicable. The District Court concluded 

### in its opinion that "Neilsen1s actions against Willoughby and Geering were deliberate

# .... Thus, Nielsenls American States Insurancepolicy does not cover the acts he committed against Willoughby and Geering.It Judge Speare also statedthatwhetherNeilsen intendedto seriously injure Willoughby 

### and Geering was 

### a question of fact to be decided by 

### a jury. However, since he found that the insurance policy did not cover Neilsentsactionsagainst Willoughbyand Geering,therewas no need to bring this issue to the jury. Finally, he concluded that Neilsen had the burden of proof to show that the settlementswith Willoughby and Geering were reasonable. The 

### court reviewed deposition testimony from Willoughby, Geering, and witnesses Sheryl Wetsch and Michelle McKinney, that Neilsen refused to cooperate with the security guards and entangled several people inaphysical altercation. These witnesses reported his kicking, hitting and biting people who were attempting 

### to restrain him, including Willoughby and Geering. Evidence thatMr. Neilsen pled guilty to three counts of misdemeanor assault gave additional support 

### to the District Court's conclusion thatNeilsen's acts were intentional and not accidental. Strecker at 480-481, 798 P.2d at 131. Actions such as biting, kicking and hitting are similar to those involved inMutual Service Cas. Ins. Co. v. McGehee, (1985), 219 Mont. 304, 711 P.2d 826,wherein Mr. McGehee struck a coworker in the face twice and the victim sought damages for his injury. Mr. McGehee attempted to have Mutual Service indemnify him under his insurance policy but the company said his actions precluded recovery and they brought suit for a declaratory judgment of the parties' rights. The court granted Mutual Services's motion for summary judgment stating that the company would not have to indemnify McGehee. On appeal, Mr. McGehee contended that the court could not grant summary judgment to the insurer because there was a factual question regarding whether he intended the specific injuries sustained by the victim. In denying insurance coverage in that instance, the Court stated:
[Tlheact of striking another in the face is onewhichwe recognizeas an act socertain to cause a particularkind of harm that we can say a person who performed the act intended the resulting harm, and his statement to the contrary does nothing to refute that rule of law.

(Citations omitted.) McGehee at 307,711 P.2d at 828. Seealso, Transamerica Ins. Group

v. Meere, (Ariz. 1984), 694 P.2d 181. The course of conduct pursued by Mr. Neilsen included acts such as hitting,biting and kickingdirected toward thosewho weretrying to restrainhim. We agree that such acts are similarto the blows struck by Mr. McGehee and are certain to cause harm of some kind,and can cause serious injury. These types of action areper

se intentional and the intent to seriously injure is evident from the commission and type or nature of the act itself. Such actions cannot be the basis for policy coveragewithout vitiating the purpose of insurance. I1[I]f a single insured is allowed through intentional or recklessactstoconsciously control risks covered by policy, the central concept of insurance is violated." (Emphasis original.) TransAmerica at 186. The exclusion clause, excluding acts which are not "accidental" developed to ensure that in standard insurancepolicies, insurance companies would pay damages for "accidents" only. 

### Wedetermined theapplicabilityof this exclusionclause under general liability insurance policiesby using a two-pronged test in Strecker. Strecker at 481, 798 P.2d at 132. If either prong of this test is satisfied,the acts at issue fallwithin the exclusion provision and are not covered under the policy. I1Thefirst prong is satisfied if the injury was 

## not caused by an accident. The second prong is satisfied if the injury was either expected or intended from the standpoint of the insured." Emphasis original. Strecker at 481, 798 P.2d at 132. In Strecker, a father attempted to invoke his insurance policy's coverage when his daughter filed a civil action against him because he had sexually molested her for 10 years. Weconcluded that such conduct was intentional and the intent to injure was present regardless of protestations to the contrary. 

### The 

### exclusion clause applied and coverage

### was precluded. Ifweapply the Strecker

### test to our conclusion

### thatNeilsenvs acts

### were intentional

### and evince an intent to injure by theirvery nature, both prongs of the test are satisfied. Therefore, the exclusion clause applies and coverage is precluded under Neilsen's American States insurance policy. Summary judgment was properly granted. 11 Did the District Court err in concluding that Neilsen had the burden of proving the reasonableness of the settlements with Wilfoughby and Geering? By reason of our above coverage

### decision,this issue is moot. AFFIRMED.



### We Concur: